High Court ruling erred on Aquino social fund

The Supreme Court (SC) may have committed a significant factual error on its ruling on the presidential social fund (PSF) as it struck down a different provision of the Philippine Amusement and Gaming Corp. (Pagcor)’s charter defining the funds.

In its landmark decision on pork barrel funds last week, the SC voided Sec. 12 of Presidential Decree 1869, or the Pagcor’s charter, under the phrase “to finance the priority infrastructure development projects.”

However, during the hearing of the House Committee on Games and Amusements on Monday, Pagcor President and Chief Operating Officer Jorge Sarmiento said that while the PSF’s term cannot be found in the corporation’s charter, it is Sec. 7 that defined the PSF.

He explained that Sec. 12 of the said law states that 47.5 percent of Pagcor’s net income is forwarded to the national treasury, not to the Office of the President (OP).

The PSF comes from the net proceeds of the corporation, once the operational expenses and the specific mandates of the law have been deducted.

“In fact, in our reporting, [PSF] refers to the monthly remittance of P110 to 150 million to the Office of the President and the designation there is presidential social fund. And the [fund that]Sec. 12 that specifically refers to our contribution to the national treasury,” Sarmiento told the lawmakers.

He maintained that they were not consulted by the High Court. But while the alleged error is currently looked upon by its legal department, Pagcor would still continue to remit funds to the OP.

“We were not consulted. To clarify this matter, it is being studied by our legal department,” he said. “I guess the confusion, if there is and there was, the reference to the infrastructure projects. And this 47.5 percent, if I’m not mistaken, also refers to infrastructure projects.”

According to the official, it has remitted to the OP a total of P6.3-billion revenues for the past three years.

Rep. Antonio Tinio of ACT Teachers party-list, a member of the committee, said that if the SC did commit an error, then the PSF—a part of what is considered as the presidential pork barrel—“remains unscathed and intact” and clearly showed that the historical ruling is merely the tip of the iceberg.

“I don’t know if this will affect the substance of the decision,” he said. “But what we found out in the hearing earlier is that the Sec. 12, a portion of which was deemed as unconstitutional by the Supreme Court, apparently has nothing to do with PSF.”

“Let’s be realistic about this decision. It is not the solution, it is not the magic bullet that has dismantled the pork barrel system,” Tinio told The Times.

Sec. 7 (a) of PD 1869, as amended by PD 1993, states that Board of Directors can “allocate and distribute, with the approval of the Office of the President of the Philippines, the earnings of the Corporation earmarked to finance infrastructure and socio-civic projects.”

Meanwhile, Sec. 12 states that: “After deducting 5 percent as franchise tax, the 50 percent share of the government in the aggregate gross earnings of the Corp. [. . .] shall immediately be set aside and shall accrue to the general fund to finance the priority infrastructure development projects.”